Citigroup CEO Vikram Pandit resigns
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Citigroup Inc Chief Executive Vikram Pandit has resigned, effectively immediately, a shock change at the top of the bank just one day after surprisingly strong quarterly results. reut.rs
Follow our liveblog for more information and analysis on Pandit's departure:
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"The timing of the move is shocking. Why they didn't announce it with the earnings is a question that needs to be answered. But Pandit is leaving at the top of his game and leaving the company in great hands. As an investor, my only question is with the timing. " --ADAM SARHAN, CHIEF EXECUTIVE OF SARHAN CAPITAL, NEW YORK reut.rs
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Citigroup press release citi.us
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New CEO Mike Corbat was once an NFL hopeful. Here's a 1982 profile in the Harvard Crimson about Corbat's college years. -
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"Pandit struggled to get an identity for Citigroup and I would say ultimately he was unsuccessful in having people know what Citigroup stands for and what it does." MATT MCCORMICK, BANKING ANALYST AND PORTFOLIO MANAGER AT BAHL & GAYNOR, CINCINNATI, OHIO reut.rs
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The WSJ has Pandit's memo to staff regarding his resignation:
"I couldn’t be more optimistic about the bank’s future. Our formula has served the company well for 200 years." -
In an interview with Bloomberg Radio, Sheila Bair, the former head of the FDIC, who's been a vocal critic of Citgroup, said the bank's leadership change was "very positive."
Here's Bair on Pandit:
"In my interactions with him on the bailout initiatives, the ring-fence with the original Wachovia situation, I saw not a good ability to execute, not a good ability to have information which I thought was pretty basic for anyone managing a large institution." -
Citi's shares fell 89% during Vikram Pandit's tenure as CEO, which began in 2007.
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The rush is on to understand Michael Corbat.
"Vikram Pandit had long turned to Michael Corbat as a repair man. Now the repair man is running the show," writes Deal Journal. on.wsj.com -
How much did Vikram Pandit earn during his time at the top of Citigroup? Bloomberg's Donal Griffin runs the numbers:
"If no alterations are made to Pandit’s compensation package, Citigroup will have paid him about $261 million in the five years since he became CEO, including his personal compensation and about $165 million for buying his Old Lane Partners LP hedge fund in 2007 in a deal that led to his becoming CEO. The bank shut Old Lane soon after Pandit took the post, causing a $202 million writedown." -
The WSJ has new CEO Mike Corbat's memo to staff.
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Felix Salmon suggests the Choice of Corbat, who was previously the bank's head of Europe, Middle East and Africa, means the bank will shift its focus on international markets:
"..the choice of Corbat is clearly a vote for Citi’s global franchise. If Corbat cuts back anywhere, it will be domestically, in the US, rather than in the faster-growing regions of the world where the Citi brand remains strong. Much was made of the fact that Pandit was an Indian leading a big US bank, but in fact Corbat has more international banking experience than Pandit had. He’s also more wonk than visionary. Which is probably a good thing." -
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CNBC's Jim Cramer reports that Pandit was forced out last night. "This is a complete shock," he said, adding "Vikram Pandit, 24 hours ago, was the belle of the ball. This guy finally got it right. Something’s wrong here."
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In April shareholders did something unprecedented: they shot down a pay package at a big bank. Pandit's $15 million package, and the compensation structure for top execs, was voted down by 55% of shareholders, the NYT reported.
Bank analyst Mike Mayo said the move was a "milestone for corporate America." -
Did Citi's failure to get back into the rebounding housing market speed Pandit's departure? Fortune's Stephen Gandel has more:
"Mortgage lending [at Citi] dropped in the quarter from a year ago. Citi's CFO admitted on Monday that the bank was late to staffing up in the area. The bank's lack of ability to pivot and get back into the housing market, something its rivals appeared to do with ease, could have been what finally pushed the board to decide that Pandit should go." -
What about Citi's succession plan?
Bank analyst Chris Whalen told Bloomberg Radio said the bank's board should explain the "disorderly" timing of Pandit's departure. Forbes' Nathan Vardi says new CEO MIchael Corbat's "first order of business should be to explain why this transfer of power at Citigroup went down in such a bizarre manner." -
Shout out to my colleague @antonymcurrie for his take on Citi earnings yesterday. He nailed it. t.coby agnestcrane via twitter 10/16/2012 3:03:32 PM -
24/7 gives ten possible reasons for Pandit's resignation. With a lack of information from Citigroup the rumors start. bit.ly
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In a short profile of Citi's new CEO, the the NYT looks at Mike Corbat's role cleaning up the bank's crisis-era mistakes:
"In perhaps his most important role, Mr. Corbat helped steer the bank through the financial crisis. As head of Citi Holdings, the “bad bank” created in the aftermath of the crisis, he oversaw Citigroup’s disastrous mortgage portfolio and the sale of several noncore businesses. Citigroup slowly regained its footing, and Mr. Corbat, who made $9 million in 2010, became a potential heir to Mr. Pandit." -
Whatever the cynics say, Vikram Pandit tookover Citigroup when it was in deep crisis and has managed to leave it in a much more stable stateby rajatgupta07 via twitter 10/16/2012 3:14:29 PM -
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Among the analyst reaction to Pandit's departure, Meredith Whitney is still not a fan of the bank:
"C is ‘the incredible shrinking bank,’ and the least interesting of the big four, in our opinion. No CEO will be able to change these facts in the near-term," Whitney told the WSJ.
Reuters has more reactions, including this from Michael Jones of Riverfront Investment Group:
"It raises tremendous questions. I think you can only attribute it to one of two things: either he has the most incompetent public relations people advising him on how to handle something like this, or something suddenly has been revealed that has caused him to have to step down, and not just step down but also step off the board immediately. All of these things are just red flags everywhere." -
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The FT has expanded upon the WSJ's reporting on a possible split between Citi's board and Pandit. Here's the FT:
"People close to the situation said Mr Pandit opted to leave immediately after a tense board meeting where succession planning was discussed. One said the underlying issues were Citi’s failure to pass stress tests earlier this year, a defeat on a “say on pay” vote and the handling of the sale of the bank’s stake in Smith Barney to Morgan Stanley." -
I wonder if a/ Pandit will join or start a hedge fund and b/ how much he will go long $C, short $JPM, $BAC ??by ldelevingne via twitter 10/16/2012 3:47:56 PM -
Dealbook is reporting that Pandit clashed with one board member in particular: Michael E. O'Neill.
It's worth noting that O'Neill took over as board chairman in April. Earlier that month, shareholders voted down pay packages for top Citi execs, including $15 million in compensation for Pandit. -
BREAKING: Citigroup board said to have ousted Pandit over poor execution, via @bloombergnews $Cby Bloomberg_TV via twitter 10/16/2012 4:00:21 PM -
Citi's Pandit: Resignation 'Was My Decision'by @djfxtrader via twitter 10/16/2012 4:03:27 PM -
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Reports of Pandit's exit are now becoming increasingly specific. Bloomberg is now reporting that Pandit was ousted because he "mismanaged operations," citing many of the same examples cited by other news outlets.
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Analyst Gary Towsend said inadequate pay may have pushed Pandit out the door at Citi. Reuters has video here.
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Pandit: "It's hard to come up with things that I would have done differently." via @BloombergTV (but not on tape) t.coby David Wessel via twitter 10/16/2012 5:32:52 PM -
"The reign of the imperial CEO is over": Echoing Felix Salmon's words on Citi's board members' reported pressure on Pandi, Steven Davidoff writes that active boards are here to stay:
"...not only do boards have more legal responsibility to run the company, they are being exhorted to do so. Boards are listening. The change is real and is amply underscored in the shake-up at Citigroup. Mr. Pandit’s resignation is remarkable because it goes beyond what had been the traditional board role, which has been to stand back and hire or fire the C.E.O. Here, the board appeared to want to change the course of Citigroup’s operations against the wishes of Mr. Pandit." -
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Yeah, sorry, just not buying the Pandit full-court press that he was the dumper, not the dumpee. $Cby markgongloff via twitter 10/16/2012 7:00:33 PM -
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